Target: ₹339
CMP: ₹301.10
PNC Infratech (PNCL) Q2-FY25 operational results were lower than consensus estimates. Numbers were impacted by weak execution as adjusted revenue declined by 58 per cent yoy. The decline in revenue was due to delay in appointed date in certain projects and due to peak monsoon in some areas.
The company has lowered their revenue guidance to -15 per cent to -20 per cent (earlier -10 per cent) for FY25 as the company is now disqualified for 1 year from bidding in MORTH and NHAI tenders. PNCL guides EBITDA margins around 12-12.5 per cent.
It has started the year with strong set of order inflow and is L1 for orders of ₹6,600 crore. Order book at ₹19,900 crore equals to 2.8x TTM Revenue with 70 per cent from road sector and remaining is from irrigation and water.
We retain Hold rating on the stock with & lowered our target price to ₹339, TP implies valuation of 10x FY26E EPS.
Stock catalyst is order win, from different state authorities and segments apart from NHAI/MORTH. Company has bid in eight tenders of Railways, area development projects & airport development projects.